Golden Agri may benefit from Cargill's CPO shift

Golden Agri may see long-term benefits from major palm oil trader Cargill’s plan to achieve 100% sustainable palm oil output by 2015.

“It’s probably a long-term positive. I don’t think we’ll see any immediate impact,” says Carey Wong, an analyst at OCBC. “I don’t think at the moment they’re at fully sustainable certification yet,” he says, but it should be achieved by 2015.

But he adds, “near-term, it will still be the (CPO) price that is driving the shares.” The UK government and industry has also committed to ensuring CPO used in food and consumer products is sustainable by 2015. CPO futures declined Tuesday amid concerns about rising inventories; the benchmark January contract at Bursa Malaysia Derivatives ended 1.8% lower at MYR2,501/ton ($1,000/ton).

Golden Agri down 0.8% to $0.63.